Monday, August 13, 2018

America is winning the trade war

President Trump used a 4 by 4 to answer doubters of his America First economic policy. 4 by 4 as in 4 percent growth and 4 percent unemployment.

Meanwhile the stock market has soared since we, the people, in the vast majority of states elected him president. Stock markets reflect investor optimism.

Which leads us to 2018, a year in which the American stock market has grown another 6% while the rest of the world's stocks have declined in value by 5.8 percent.

Hahaha.

Pundits told us America would lose a trade war.

Robert J. Samuelson of the Washington Post wrote in June, "If we are to have a Trade War with China, it would be best to win it. We should be better off after the fighting. Unfortunately, the chances of this happening seem slim to none, because President Trump’s plan of attack suggests that everyone — us and them — will lose."

Again, hahaha.

President Trump had a plan. He always does. It is just that Samuelson could not figure out the plan.

Our president has used tariffs to twist arms and get allies in the trade war with China.

Most people saw the U.S. trade deficit and assumed we had the poor hand. They assumed we were desperate for a deal.

But President Trump saw the $800 billion-a-year deficit as a bargaining tool, much as he saw his name as a bargaining tool when he went through his first visit to bankruptcy court. World bankers from Frankfurt to Tokyo kept him on because taking his name off his casinos would make them worthless.

So it goes with world trade.

You see, when your economy is the No. 1 source for the world's trade surpluses, other nations must do your bidding to keep you as a customer.

Bloomberg News explained it well, reporting, "With stress breaking out from Turkey to Russia, equities in China bouncing around to the tune of $100 billion a day and talk of contagion everywhere, U.S. shares are turning into the safest bet. The S&P 500 is up 6 percent in 2018 and the rest of the world is down 5.8 percent, the biggest split in four years.

"Credit the impregnable U.S. earnings fortress if you want, but it’s hard to ignore the fingerprints of another American institution: the president, whose campaign over trade has torpedoed progress that last year sent emerging market stocks soaring the most in almost a decade. The fruits of a coordinated global economic recovery may still be out there, but right now it’s mainly investors in the U.S. who are enjoying them."

By the way, some of this nearly 12-point swing is President Trump's tax policy. Dropping the corporate tax rate and giving a go discount to money made overseas repatriated in the USA gave spurred this investment.

We need to tell girly man Trudeau, he has 30 days to make a deal if no deal is made by deadline an immediate 20% tariff on all cars coming into the US!! Screw Canada like they have screwed the US for 20 years. Bring manufacturing back to the US.

Paul Krugman hasn't been right about anything in at least a decade. His capability was at best limited and knowledge was old school radical from the 60's. No insight into modern time could save his reputation in economics.